In the multiple regression model, the least squares estimator is derived by
A) minimizing the sum of squared prediction mistakes.
B) setting the sum of squared errors equal to zero.
C) minimizing the absolute difference of the residuals.
D) forcing the smallest distance between the actual and fitted values.
Answer: A
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Economic theory is a necessity, not a luxury. This statement is true because theory
A. always leads to practical and useful policy. B. can prevent depressions in the economy. C. substitutes for vast amounts of data. D. provides a structure for organizing and analyzing data. E. always leads to accurate predictions.
Ryan saved $50,000 last year in his bank account so that he could buy a car this year. In this case, money served the function of a ________
A) unit of account B) means of deferred payment C) store of value D) medium of exchange
Individual members of a cartel have an incentive to ____ the cartel agreement because pursuit of ____ will maximize individual profit
a. adhere to; self-interest b. cheat on; collective interest c. cheat on; self-interest d. adhere to; collective interest
Figure 10-18
Beginning from a point of short-run equilibrium at point E2 in , the economy's movement to a new position of long-run equilibrium from that point would best be described as
a.
a movement along the AD2 curve with a shift in the SRAS1 curve to SRAS2.
b.
a movement along the SRAS2 curve with a shift in the AD2 curve.
c.
a shift in the LRAS curve to an intersection at E3.
d.
no shift of any kind.